This proposed system would be launched in 2010 with 600 major sources of global warming pollutants, including power plants, refineries and concrete factories.

The state of California aims to reduce greenhouse gas emissions to 1990 levels by 2020. The new rule will also include reductions in emissions from industrial and transportation fuels beginning in 2015.

Still, the draft rule evades one of the key issues in designing any cap-and-trade system: how to allocate permits that allow companies to emit greenhouse gases. A bill that was passed in the House in June will distribute roughly 85 percent of the permits to various parties and industry sectors in the early years of the program, before more of them are auctioned in later years.